NASCAR Introduces New Rules Packages to Place Spotlight on Driver Ability

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NASCAR has introduced 2 baseline rules packages for the 2019 Monster Energy NASCAR Cup season designed to “promote closer competition and increased opportunities for passing”, as the racing circuit looks to drive fan interest. The revised aerodynamic and engine configurations are expected to “foster tighter racing on the majority of the speedways measuring longer than 1 mile”, a measure intended to return the focus from “engineering and wind tunnels” to the sport’s drivers and “hard side-by-side racing roots.”

Fan Marino: Both television viewership and racetrack attendance are down in ’18, but the last 2 races at Charlotte and Dover experienced YoY growth in TV viewership (attendance figures have not been released). Last Sunday’s Monster Energy NASCAR Cup Series Round of 12 race at Dover, DE drew a larger television audience (+1%, 1.26 rating on NBCSN) than the same race at the Monster Mile in ’17 (1.25 rating on NBCSN), despite last year’s event holding greater stakes (it was the round of 16 cut-off race) and the Eagles playing head to head just 75 miles north; the week prior NASCAR’s Cup Series race at the ROVAL (road course/oval hybrid) posted a 1.95 rating (+6% YoY) on NBC. This Sunday the racing circuit heads to Talladega “The Biggest & The Fastest” NASCAR has to offer, expect the television audience to match; the 2017 race recorded the highest viewership rating of any ’17 playoff race (2.84 rating, 4.743 million viewers).

Last weekend, Dover International Speedway became the first NASCAR track (including Las Vegas Motor Speedway) to offer on-site sports betting. Fans in attendance could legally place bets on both the Xfinity and Cup Series races in addition to a full slate of college and NFL games. While it’s too early to determine the impact of the race on October’s handle (DDE reported $3.3 million wagered in September), in the 4 months since Delaware began taking sports bets NASCAR races have seen little to no action; just .02% ($60,000) of the $39.77 million wagered on sports had been gambled on circuit competition.

Howie Long-Short: Dover Downs Gaming & Entertainment (DDE) operates the sportsbook at Dover International Speedway. Shares of the company are +152% YTD. They rose +42% when SCOTUS struck down in late May, but the biggest gains this year (+56%) came following July’s announced merger with Twin River Worldwide Holdings (has a retail presence in MS, RI and CO); a union that “will help us grow our business, invest in our people and our facilities and compete more effectively given changes in gaming on the horizon.” Upon closing, Twin River will list shares of the company on the NYSE or NASDAQ.

DDE (reports earnings on 10.24) isn’t the only way to invest in Delaware sports betting; Scientific Games, the state’s primary sports betting contractor, is also publicly traded (SGMS). The company is entitled to 15.6% of the net take with the balance split between state, casinos and horse racing industry.

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Delaware Realizes $1 Million+ From June Sports Bets

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The State of Delaware took in more than $7 million in sports bets between June 5th-24th, realizing $1,000,247 in revenue over the 20-day span. Delaware sports fans placed +/- 70,000 wagers at the state’s land-based racinos (i.e. no mobile), with the average bet worth $100. 75% of the dollars placed were on baseball games, with the World Cup (10%) and NBA Finals (8%) also drawing heavy action. The First State became the 1st state (besides Nevada) to offer single game sports wagering following SCOTUS’ May ruling to overturn PASPA.

Howie Long-Short: +/-$1 million in revenue equates to a 14% hold, far higher than the 5.5% Nevada has averaged dating back to ’92. Those results were “pleasantly surprising” to DE Lottery Director Vernon Kirk, who acknowledged that he’d “be surprised if it (the handle) stayed that strong.”

I asked Dustin Gouker, Managing Editor of Legal Sports Report why he thought the handle was so high; he said, “it’s too early to read too much into the hold. It’s a small sample size and it may simply be lots of bettors that are not terribly savvy, trying to figure out wagering.”

Just one of DE’s land-based racinos is publicly traded, Dover Downs Hotel & Casino, a subsidiary of Dover Downs Gaming & Entertainment (DDE); the company netted $57,293 in June from sports bets. However, all 3 of the state’s sports betting contractors are publicly listed. Scientific Games (SGMS), William Hill (WIMHY) and StadiumTech (a subsidiary of GVC Holdings, OTC: GMVHF) combined to take in $125,000 (12.5% of gross revenue) in DE sports gambling revenue for the 3-week period ending on June 24th (fiscal month).

Fan Marino: A recent white paper from GamblingCompliance projected the U.S. legal sports betting market would be “worth between $3.1-$5.2 billion in annual revenue by 2023.” The report also predicted that 25-37 states will “have lawful wagering within 5 years”, that New York would become the largest sports betting market (generating $700 million/year in annual gross gaming revenue) and that NY would become the “first state to grant leagues a cut of betting handle and require use of their data.” While those last 2 prognostications may be true, they likely won’t come to fruition before 2019; state legislators failed to pass a bill before adjourning the session. Governor Cuomo is on record doubting that a sports betting bill would pass this year.

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Delaware Casinos to Begin Taking Sports Bets Tomorrow

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Delaware (not New Jersey) will become the first state outside Nevada to take sports bets following the May 14 SCOTUS decision to overturn PASPA. Delaware’s three land-based casinos (i.e. no mobile, online) open their sportsbooks for business at 1:30p on Tuesday, June 5. The state will enable single game betting (i.e. no in-game bets) and “championship wagering” on various sports/leagues for the first time. Delaware bettors have been able to place multi-game parlay wagers (min. three games) through the state’s lottery system on the NFL games since ’09, the state had the parlays grandfathered in when PASPA was enacted in 1992. The New Jersey state legislature is scheduled to vote on their sports betting bill later this week (June 7). Mississippi, Pennsylvania and West Virginia are also expected to begin offering sports betting before the start of football season.

Howie Long-Short: Delaware Park, Dover Downs Hotel & Casino and Harrington Raceway & Casino are the properties that will begin to take sports bets. Delaware Park and Harrington Raceway are privately owned, but Dover Downs Hotel & Casino is a subsidiary of Dover Downs Gaming & Entertainment (DDE). Back in late April, DDE reported $17.7 million in Q1 ’18 gaming profits (on $34.13 million in revenue) – but a pre-tax quarterly loss of $361,000. Why? The state’s gaming tax structure had them paying out $18.1 million “to the State and Horsemen.” The industry is lobbying for a “casino relief bill” (recently passed by Delaware State Senate) that would reduce their obligation to the state. DDE shares are up 31% (to $1.95) since SCOTUS’ May 14thdecision.

DDE isn’t the only way to invest in Delaware sports betting, Scientific Games the state’s primary sports betting contractor is also publicly traded (SGMS). The company is entitled to 15.6% of the net take with the balance split between state, casinos and horse racing industry.

Fan Marino: Bettors will be able to wager on baseball, football, basketball, hockey, golf, soccer and auto racing, but are not currently permitted to place bets on college basketball or college football games; it’s expected that will change eventually. For the State of Delaware to maximize gaming revenues, it’ll have to — college basketball and college football generate more revenue for Nevada sportsbooks than any other sport. It should be noted that games involving Delaware based teams will be off the boards at all three casinos.

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